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HomeUncategorizedMarket Watch: Futures Fall Ahead of Key PCE Inflation Data; DJT Shares...

Market Watch: Futures Fall Ahead of Key PCE Inflation Data; DJT Shares Decline.

Market Watch: Dow futures contract fell by 0.05%, S&P 500 futures by 0.2%, and Nasdaq 100 futures by 0.4%..

Stock futures are slightly lower as investors prepare for the unveiling of the Federal Reserve’s preferred inflation gauge, which could influence interest rate cuts later this year. Trump Media & Technology shares slip.

PCE price index

Traders are closely monitoring the release of the personal consumption expenditures (PCE) price index on Friday, which could influence the US central bank’s approach to interest rate cuts later this year. The headline PCE index for April is forecast at 2.7% annually and 0.3% monthly, matching the pace registered in March. The core PCE is also expected to be 2.8% year-on-year and 0.3% versus the prior month.

DJT slips

Trump Media & Technology (DJT), the parent company of Trump Social, experienced a significant drop in shares after a jury found Trump guilty in a “hush money” trial. The jury found Trump guilty of falsifying business records to conceal a $130,000 payment to actress Stormy Daniels. Trump will face a sentencing hearing in July. The company’s stock price has dropped by over 18% since its debut in March.

Chinese manufacturing activity

Chinese manufacturing activity unexpectedly contracted in May, according to purchasing managers’ index (PMI) data. The manufacturing PMI read 49.5, weaker than expectations of 50.5, and contrasting with expansions in the prior two months. The manufacturing industry is a key driver of China’s economy.

Economic Calendar

  • 8:30 Personal Income and Outlays
  • 9:45 Chicago PMI
  • 1:00 PM Baker-Hughes Rig Count
  • 3:00 PM Farm Prices
  • 6:15 PM Fed’s Bostic Speech

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Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow, the benchmark  and tech-heavytouched record marks last week.

The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.

Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow,

The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.

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MFitch Ratings has downgraded China’s credit rating outlook to “Negative” from “Stable” due to concerns over growing public debt and slowing growth in the world’s second-largest economy. The agency affirmed China’s rating at A+, citing increasing risks to China’s public finance outlook. Concerns over slowing economic growth have grown in recent months, with Fitch expecting gross domestic product growth to fall to 4.5% in 2024.

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U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.

Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.

U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.

Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.

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